Formulating a National Action Plan for Financial Inclusion in Solomon Islands
Author: Mike McCaffrey
Source: In Search of Sustainability: The Provision of Rural Financial Services in Solomon Islands
In Solomon Islands an estimated 85% of the population is without access to financial services. The financial services sector is represented by large, modern and profitable institutions based in Honiara while financial services and infrastructure elsewhere is extremely limited. The products and services are mostly designed to serve higher income earners, business owners, government and their employees, and do not meet the needs of low income or rural people.
This focus note:
• provides an overview of the financial services currently available in Solomon Islands
• 3 fundamental focus areas
• SWOT analysis for the Financial Services Sector in Solomon Islands
A Timely Moment for Action
In 2010, there are some exciting developments that were not available in 2005:
• There is greater donor agency interest and commercial sector commitment to developing retail products and services that promote financial inclusion.
• The three commercial banks have been undertaking some new product development for lower-end retail clients in other countries, including the innovative use of technology.
• Mobile network operators are also entering the scene, helping financial service providers improve communication between branches at reduced cost and two providers have launched mobile money services.
• These services resulted in part from several years of healthy competition between operators, something that has just begun in Solomon Islands.
• Finally, the CBSI has joined the Pacific Central Bank Financial Inclusion Work Group and the Alliance for Financial Inclusion to evaluate policy and regulation with regards to financial inclusion.
• The political and economic situation is also improving. After years of considering Solomon Islands too unstable or undeveloped a country in which to invest, private sector players now seem ready to invest.
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